While on a freebasing binge during the making of the film Stir Crazy (1980), Pryor doused himself in rum and set himself on fire. Pryor incorporated a description of the incident into his comedy show Richard Pryor: Live on the Sunset Strip (1982). He joked that the event was caused by dunking a cookie into a glass of low-fat and pasteurized milk, causing an explosion. At the end of the bit, he poked fun at people who told jokes about it by waving a lit match and saying, "What's that? Richard Pryor running down the street."

After his "final performance", Pryor did not stay away from stand-up comedy long. Within a year, he filmed and released a new concert film and accompanying album, Richard Pryor: Here and Now (1983), which he directed himself. He also wrote and directed a fictionalized account of his life, Jo Jo Dancer, Your Life Is Calling, which revolved around the 1980 freebasing incident.

In 1983 Pryor signed a five-year contract with Columbia Pictures for $40 million and he started his own production company, Indigo Productions. Softer, more formulaic films followed, including Superman III (1983), which earned Pryor $4 million; Brewster's Millions (1985), Moving (1988), and See No Evil, Hear No Evil (1989). The only film project from this period that recalled his rough roots was Pryor's semiautobiographic debut as a writer-director, Jo Jo Dancer, Your Life Is Calling, which was not a major success.

Despite his reputation for constantly using profanity on and off camera, Pryor briefly hosted a children's show on CBS called Pryor's Place (1984). Like Sesame Street, Pryor's Place featured a cast of puppets (animated by Sid and Marty Krofft), hanging out and having fun in a friendly inner-city environment along with several children and characters portrayed by Pryor himself. Its theme song was performed by Ray Parker, Jr.[citation needed] However, Pryor's Place frequently dealt with more sobering issues than Sesame Street. It was cancelled shortly after its debut.[citation needed]

Pryor co-hosted the Academy Awards twice and was nominated for an Emmy for a guest role on the television series Chicago Hope. Network censors had warned Pryor about his profanity for the Academy Awards, and after a slip early in the program, a five-second delay was instituted when returning from a commercial break. Pryor is also one of only three Saturday Night Live hosts to be subjected to a rare five-second delay for his 1975 appearance (along with Sam Kinison in 1986 and Andrew Dice Clay in 1990).[citation needed]

Pryor developed a reputation for being demanding and disrespectful on film sets, and for making selfish and difficult requests. In his autobiography Kiss Me Like a Stranger, co-star Gene Wilder says that Pryor was frequently late to the set during filming of Stir Crazy, and that he demanded, among other things, a helicopter to fly him to and from set because he was the star. Pryor was also accused of using allegations of on-set racism to force the hand of film producers into giving him more money: